At the 2023 SMM 12th Metal Industry Annual Conference - SMM Steel Forum, jointly hosted by SMM, the People's Government of Jiangjin District in Chongqing, and the Shanghai Futures Exchange, Lu Ting, SMM's Senior Director of the ferrous metals consultation team, analyzed the current state and future trends of the global iron ore industry.
Global Iron Ore Supply Status
Global Iron Ore Reserve Distribution
The majority of global iron ore reserves are concentrated in Australia and Brazil, accounting for half of the world's iron ore reserves.
► Iron Ore Reserve Distribution
According to data from the USGS, as of the end of 2022, global iron ore reserves were estimated at 180 billion mt, containin 85 billion mt of iron and an average grade of 47%.
Additionally, countries such as the United States, Sweden, Kazakhstan, South Africa, and Guinea, which has recently started development, also possess significant iron ore resources.
Global Iron Ore Supply
Australia, Brazil, China, and India are the major producers of iron ore globally, with a 2% increase in global iron ore production before 2023.
Global Iron Ore Trading
Iron ore is a commodity with a mismatch between supply and demand, with nearly two-thirds of it being used in export trade.
In global iron ore maritime trade, the route from Australia to China accounts for nearly 50% of the total volume.
Global Iron Ore Demand Status
Global Iron Ore Demand
The majority of global iron ore demand is centered in China, with a projected 2% increase in global iron ore demand by 2023.
Global Iron Ore Demand
Steel-producing countries opt for different steelmaking and ironmaking routes based on their resource endowment.
Global Iron Ore Demand
Due to the availability of iron ore and variations in ironmaking technologies, the furnace charge ratio in steel mills also exhibits distinct characteristics.
Future Trends in Global Iron Ore Development in the Next 5-10 Years
Decarbonization Policies
Over 985 companies worldwide have announced their carbon neutrality goals, including more than 20 steel mills.
What's Happening in Steelmaking Worldwide?
Global steelmakers are developing EAF technology. Scrap steel will also become a strategic resource, and DRI/ HBI are becoming focal decarbonization products.
•Currently, EAF steel production in China accounts for less than 10% of total crude steel production.
•The Ministry of Industry and Information Technology has set a target for EAF steel to constitute over 15% of total crude steel production by 2025. Additionally, the China Iron and Steel Association has proposed a long-term plan for EAF steel to account for over 30% of total crude steel production by 2035.
•According to SMM statistics, 100 million mt of new EAF steel production capacity will be built in the future, while 40 million mt of outdated capacity will be eliminated, resulting in a net increase of 60 million mt.
•The China Association of Metalscrap Utilization aims for scrap steel to account for 30% of furnace charge used in steelmaking process by 2025, compared to the current level of around 20%.
•SMM estimates that 10 million mt of DRI production will be achieved by 2030.
♦India ranked second globally in crude steel production with 125 million mt in 2022.
♦In 2017, India introduced the National Steel Policy 2017, aiming for a crude steel capacity of 300 million mt and a production of 255 million mt. The per capita crude steel consumption is targeted to reach 160 kg. The proportion of electric arc furnace steel is expected to decrease to 30%, while blast furnace steel is projected to increase to 68%. The scrap steel utilization rate is planned to reach 30%.
♦If India follows its planned trajectory, domestic iron ore production may be insufficient. One possible path is to relax the approval of domestic iron ore mining rights and increase scrap steel imports.
What are global iron ore companies doing?
•In the context of decarbonization, steel mills worldwide are undergoing transformations, with one of the most concentrated directions being DRI. This has also prompted major global iron ore giants to collaborate with steel mills and seek their own forms of iron ore transformation.
•In the short term, mines that produce high-grade iron ore are shifting towards producing HBI.
• Some other mines that produce high-grade iron ore are also transitioning towards producing DRI concentrates or pellets.
•In the long term, mines that produce low-grade ore are partnering with technology companies to seek technological breakthroughs. For example, Rio Tinto is utilizing low-grade ore to produce DRI, employing CCUS technologies, as well as exploring biomass-based steelmaking techniques.
A new boom period for the iron ore industry has led to a proliferation of global projects, with Africa becoming a hot region for investment.
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